Financial Services Entry through GIFT City IFSC

For India-linked international financial services, GIFT City is now the central entry point. It hosts India's International Financial Services Centre — a single-regulator jurisdiction in which the International Financial Services Centres Authority oversees banking, funds, insurance, leasing and capital markets under one roof — and the Finance Act 2026 made it more attractive still by extending its tax holiday to twenty years for eligible units. But "entering GIFT City" is not one decision. It is an activity-based platform: a bank, a fund manager, a family office, an insurer, an aircraft lessor and a fintech each enter through a different IFSCA licence with different conditions, capital and substance. The first question is not whether GIFT City is attractive; it is which financial activity the institution is bringing, and whether that activity belongs inside the IFSC perimeter at all.

GIFT City is not a single licence; it is a set of activity-specific regimes, and the structure follows the activity and the client. The main routes are:

A foreign institution should start from the activity and the licence it needs, not from the tax holiday. The capital requirement, the regulatory conditions, the permitted business and the structure all differ by activity.

• A bank or financial institution enters through an IFSC Banking Unit — for foreign-currency lending, external commercial borrowing, trade finance and treasury, with the RBI and IFSCA interface to manage.
• An asset manager enters through a Fund Management Entity — choosing the FME category, the fund vehicle, the investor base and the substance.
• A family office enters through a family investment fund or the FME route — on the eligible family structure, control, succession and substance.
• An insurer or reinsurer enters through an IFSC insurance office — on capital, permitted risk, parent support and regulatory approval.
• An aircraft or ship lessor enters through a finance-company or leasing unit — on asset ownership, lease flows, tax, financing and repossession.
• A fintech or platform enters through the fintech, sandbox or capital-market route — on permitted activity, data, outsourcing and customer geography.
• A treasury centre enters through an IFSC treasury or finance-company structure — on group funding, withholding tax, transfer pricing and substance.

Banking is GIFT City's largest activity. An IFSC Banking Unit is a foreign-currency operation used for offshore lending, external commercial borrowing (ECB), trade finance and treasury, and it is why so much of India's external borrowing is now arranged from the centre; the interface between IFSCA and the Reserve Bank of India is part of the structure to navigate, and the parent bank must commit minimum regulatory capital to the unit (commonly cited at US$20 million). For corporate groups, GIFT increasingly serves as a treasury and finance-company location — a base for group funding, intercompany lending and cash management in foreign currency — where the withholding-tax, transfer-pricing and substance positions on the flows are central. The attraction is the combination of an onshore-India location with foreign-currency, internationally-regulated banking and treasury.

Substance in GIFT City is not cosmetic, and it is not only a tax issue — it is regulatory, governance, licensing and treaty risk at once. The fund-management framework requires the key activities of a Fund Management Entity — the investment decision-making, the portfolio management, the grievance handling — to be undertaken from the IFSC office, with the required key managerial personnel based there — and IFSCA has begun enforcing this in practice, issuing in 2025 its first formal action against a fund-management entity whose key personnel were absent during an unannounced inspection, so the requirement is tested, not nominal. The same logic runs through the other activities. For a fund manager that means investment decision-making, portfolio management, governance and key personnel have to be located and evidenced in GIFT to support both regulatory compliance and the tax and treaty positioning; for a bank, an insurer or a lessor it means real operations and decision-making in the centre. A structure that holds a GIFT licence but is run from elsewhere fails on more than one front, and the substance has to be built in from the outset, not retro-fitted.

A GIFT City entry is an incorporation, a licence application and a structuring exercise at once. The legal work usually runs across:

• selecting the activity and the corresponding IFSCA framework — banking unit, Fund Management Entity, family investment fund, insurance, finance or leasing company, fintech or other;
• confirming the activity belongs inside the IFSC perimeter rather than mainland RBI, SEBI or insurance regulation — or designing both where needed;
• incorporating the IFSC entity and completing the IFSCA registration or licence and the capital requirement;
• structuring the fund, family-office, treasury or holding vehicle, and treating the proposed Variable Capital Company framework as forthcoming, not available;
• establishing genuine substance — investment decision-making, portfolio management, governance and key personnel located and evidenced in GIFT;
• mapping the tax-holiday and exemption position to the activity, and the withholding and treaty position on flows;
• the corridor structure where the group also operates a DIFC, ADGM or other presence; and
• ongoing IFSCA compliance, reporting and the activity-specific regulatory obligations.

ATB advises foreign financial institutions and families on entering India through GIFT City, matched to the activity — banking, fund management, family office, insurance, leasing, treasury or fintech — and starting from the right question: does the activity belong inside the IFSC perimeter, inside mainland regulation, or both. We work the activity and IFSCA licence, the IFSC entity and capital, the fund, family-office, treasury or holding structure, the substance that the regulatory and tax positions require, the tax-holiday and exemption analysis, and any re-domiciliation. For groups across the India-UAE corridor, we set GIFT against DIFC, ADGM and Singapore and design the structure across the centres. The conversion point holds here: the value is in building the right licence, substance, tax and cross-border-flow structure around the specific activity, not in the tax holiday alone.